WASHINGTON - Sales at U.S. retailers rose less than forecast in January, reflecting an unexpected drop in purchases of automobiles.

The 0.4 percent gain reported by the Commerce Department Feb. 14 in Washington was half the 0.8 percent rise median forecast of economists surveyed by Bloomberg News. Purchases excluding car dealers climbed 0.7 percent, more than projected and the biggest gain since March.

Retailers like Target Corp. and Limited Brands Inc. topped analysts’ sales forecasts last month, when many companies offered incentives to bring back shoppers after holiday sales stagnated. Further gains in employment are needed to bolster wages and underpin confidence, ensuring that demand can be sustained.

“Consumers are being very picky at this point,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “We saw aggressive retailer discounting and sharp price cuts in the new year. It bodes poorly for retailers’ margins.”

Purchases were also revised down 0.1 percentage point in each of the prior two months -- to unchanged in December and a 0.3 percent rise in November. Stagnant yearend sales prompted economists at Morgan Stanley to trim their tracking estimates for consumer spending in the fourth quarter and first three months of 2012.

Stocks fell after the report. The Standard & Poor’s 500 Index decreased 0.3 percent to 1,348 at 11:32 a.m. in New York.

Elsewhere, German investor confidence surged to a 10-month high in February as global growth improved and Europe’s debt crisis showed signs of abating.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, rose to 5.4 from minus 21.6 in January. That’s the highest since April and the third straight increase.

In Japan, the central bank unexpectedly added 10 trillion yen ($128 billion) to an asset-purchase program and set an inflation goal after an economic slide fueled criticism it has been slower to act than counterparts.

Business Inventories

Business inventories in the U.S. rose less than sales in December, showing companies may keep restocking shelves and warehouses early this year. The 0.4 percent increase in stockpiles compared with a 0.7 percent jump in purchases that was the biggest since July, Commerce Department figures showed Feb. 14.

Prices of goods imported into the U.S. rose 0.3 percent in January, reflecting higher costs for automobiles and petroleum, according to a report from the Labor Department today. It was the second increase in the past six months, indicating little pressure in prices from overseas.

Nine of 13 major retail categories showed gains last month, led by a 2 percent jump at general merchandise stores, including department stores, which was the biggest in five years.

Purchases of cars and light trucks climbed to an annualized rate of 14.1 million last month, the highest since the so-called cash-for-clunkers program in August 2009 and the second- strongest since May 2008, according to Autodata Corp. Sales averaged 16.4 million in the two years before the last recession began in December 2007.

The January gain came even as automakers reduced incentives by 5.6 percent, or about $144 per vehicle sold, to $2,435 in January, Woodcliff Lake, New Jersey-based Autodata said Jan. 31.

With the average age of cars and trucks rising to a record 10.8 years, analysts see pent-up demand boosting U.S. sales to a third-straight annual gain in 2012, the longest streak since sales peaked in 2000. An improving job market and available credit may propel an increase in vehicle sales of more than 6 percent from 2011 to 13.6 million, the average of 18 analysts’ estimates.

Industry Data

The government uses the industry data to calculate gross domestic product, making the reported decrease in dealer demand less significant.

Sales excluding autos, gasoline and building materials, which render the figures used to calculate GDP, rose 0.7 percent, the most since September, after dropping 0.4 percent the prior month.

The figures follow a report earlier this month that showed improvement in the labor market may help sustain spending. Employers added 243,000 jobs in January, the most since April, and the unemployment rate dropped to a three-year low of 8.3 percent, according to the Labor Department.

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